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Accounting Policies of Jindal Hotels Ltd. Company

Mar 31, 2018

NOTE: 1

1.1 CORPORATE INFORMATION

JINDAL HOTELS LIMITED is a Public limited Company, incorporated on 4th day of May, 1984 under the Companies Act. The Registered office of the Company is situated at: Hotel Surya Palace, Sayajiganj, Vadodara. The Corporate Identification Number (CIN) of the Company is L18119GJ1984PLC006922 as per the Ministry of Corporate Affairs (MCA).

The Equity shares of the company are listed at the Bombay Stock Exchange (BSE), Mumbai (Scrip Code 507981& Scrip Symbol JINDHOT). The Capital structure of the company comprises of authorized capital and paid up capital of Rs 600.00 Lakh respectively divided into 60,00,000 Equity Shares of Rs. 10/- (face value ) each.

The Company is engaged in business of operating 3 star category Hotel (namely Grand Mercure Vadodara Surya Palace) and Restaurant (namely Azure Restaurant). It is one of the leading Business Hotel in Vadodara City with 143 Guest Rooms, 6 large and medium Banquet halls, Board Room, Restaurant, Swimming Pool, Health Club, Liquor shop and many other amenities and has secured sizeable amount of market share. Many reputed MNC’s, Corporate, PSU’s, Private sector units etc are major customers of the Company since long.

1.2 BASIS OF PREPARATION

i. Compliance with Indian Accounting Standards

The financial statements comply in all material aspects with Indian Accounting Standards (“Ind AS”) notified under section 133 of the Companies Act, 2013 (“the Act”), Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act as applicable.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the Accounting Standards notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (“Indian GAAP”) and other relevant provisions of the Act as applicable.

These financial statements are the Company’s first Ind AS financial statements and are covered by Ind AS 101- First time Adoption of Indian Accounting Standards. The transition to Ind AS has been carried out from the accounting principles generally accepted in India (“Indian GAAP”) which is considered as the ‘Previous GAAP’ for purposes of Ind AS 101. An explanation of how the transition to Ind AS has affected the Company’s financial position, financial performance and cash flows is provided in Note 40 of the financial statement.

ii. Historical cost convention

The financial statements have been prepared on a historical cost basis, except the following:

- Certain financial assets and liabilities that are measured at fair value;

- Defined benefit plans - plan assets measured at fair value.

iii. Functional and presentation currency

These financial statements are presented in Indian Rupees, which is the Company’s functional currency, and all values are rounded to the nearest lakhs, except otherwise indicated.

iv. Composition of Financial Statements The financial statements comprise:

- Balance Sheet

- Statement of Profit and Loss

- Statement of Cash Flow

- Statement of Changes in Equity

- Notes to Financial Statements

1.3 SIGNIFICANT ACCOUNTING POLICIES

A. Property, Plant and Equipment:

i. Recognition and measurement

Freehold land is carried at cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by management, are recognized in the Statement of Profit and Loss.

If significant parts of an item of property, plant and equipment have different useful life, then they are accounted and depreciated for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in the Statement of Profit and Loss.

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 measured as per the Previous GAAP and use that carrying value as the deemed cost (except to the extent of any adjustment permissible under other accounting standard) of the property, plant and equipment.

ii. Subsequent Expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

iii. Capital Work-in-Progress

Plant and properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees and, for qualifying asset, borrowing costs capitalized in accordance with the Company’s accounting policies. Such plant and Properties are classified and capitalized to the appropriate categories of Property, Plant and Equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the asset are ready for their intended use.

iv. Depreciation

Depreciation on tangible fixed assets is provided in accordance with the provisions of Schedule II of the Companies Act 2013, on Straight Line Method. Depreciation on additions / deductions is calculated on pro rata basis from/up to the month of additions/deductions. The estimated useful life, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

B. Intangible Assets:

i. Recognition and measurement

Intangible Assets are stated at cost of acquisition less accumulated amortization and accumulated impairment, if any. Amortization is done over their estimated useful life on straight line basis from the date that they are available for intended use, subjected to impairment test.

C. Impairment:

i. Non - financial assets

At each balance sheet date, the Company assesses whether there is any indication that any property, plant and equipment and intangible assets with finite life may be impaired. If any such impairment exists, the recoverable amount of an asset is estimated to determine the extent of impairment, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

D. Inventories:

Company follows the practice of charging to revenue, the cost of various inventories, on actual consumption basis. Inventories are valued at lower of cost or net realizable value. Cost is arrived at on First In First Out basis.

E. Investments and Other Financial Assets:

Classification

The Company classifies its financial assets in the following measurement categories:

- Those to be measured subsequently at fair value (either through other comprehensive income, or through Statement of Profit and Loss), and

- Those measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in Statement of Profit and Loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

The Company reclassifies debt or equity investments when and only when its business model for managing those assets changes.

Measurement

At initial recognition, in case of a financial asset not at fair value through profit and loss, the Company measures a financial asset at its fair value plus, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through Statement of Profit and Loss are expensed in Statement of Profit and Loss.

(a) Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.

(b) Fair Value through Other Comprehensive Income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through Other Comprehensive Income (OCI), except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in Statement of Profit and Loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit and loss and recognized in other gains/ losses. Interest income from these financial assets is included in other income using the effective interest rate method.

(c) Fair value through profit and loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through Statement of Profit and Loss. Interest income from these financial assets is included in other income.

Equity Instruments

The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to Statement of Profit and Loss. Dividends from such investments are recognized in Statement of Profit and Loss as other income when the Company’s right to receive payment is established.

Changes in the fair value of financial assets at fair value through profit and loss are recognized in other gain/losses in the Statement of Profit and Loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Derecognition

A financial asset is derecognized only when

(a) The Company has transferred the rights to receive cash flows from the financial asset or

(b) Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

F. Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and highly liquid investments with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

G. Financial Liabilities:

Measurement

All financial liabilities are recognized initially at fair value and in the case of loans, borrowings and payables recognized net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Gains and losses are recognized in Statement of Profit and Loss when the liabilities are derecognized as well as through the EIR amortization process.

H. Foreign Currency Translation:

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Indian Rupee (INR) is the functional and presentation currency of the Company.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing exchange rate. Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company’s monetary items at the closing rate are recognized as income and expenses in the Statement of Profit and Loss, in the period in which they arise.

I. Revenue recognition:

Revenue from Operation comprises of sale of Guest Rooms, Food and Beverages, are exclusive of Luxury Tax, VAT, Service Tax, Goods and Services tax and other Taxes except Wine Sales which is inclusive of value added tax.

Other Operating Income includes Income from Telecommunication, Laundry Services, Spa Services, Travel Desk and income from other miscellaneous services.

J. Other Income:

Other Income comprises of gain or loss in Foreign exchange earnings, Interest Received, Dividend Received and Other Miscellaneous Income.

K. Employee benefits:

A. Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, bonus, etc. are recognized at actual amounts due in the period in which the employee renders the related service.

B. Post-employment Benefits:

(i) Defined contribution plans

Defined contribution plans are Provident Fund Scheme administered by Government for eligible employees. The Company’s contribution to defined contribution plans are recognized in the Statement of Profit and Loss.

(ii) Defined Benefit Plans

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump-sum payment to eligible employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the Projected Unit Credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in Other Comprehensive Income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.

(iii) Compensated Absences:

Entitlement of employees accumulating earned leave and eligibility of compensation or encashment of the same is also a defined benefit obligation and is treated as long term in nature in terms of the policies of the Company for the same. The value of obligation towards the same is provided for on the basis of actuarial valuation using projected unit credit method as at the balance sheet date. Actuarial gain / losses are immediately taken to the Statement of Profit and Loss and are not deferred.

(iv) Terminal Benefits

All terminal benefits are recognized as an expense in the period in which they are incurred.

L. Borrowing costs:

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.

M. Impairment of Assets:

An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired.

N. Income tax:

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in India. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences only if it is probable that future taxable amounts will be available to utilize those temporary differences.

Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets are not recognized for temporary differences between the carrying amount and tax bases of investments in subsidiaries, branches and associates and interest in joint arrangements where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary difference can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously

Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.

O. Provisions and Contingencies:

i. Provisions

Provisions for legal claims, product warranties and make good obligations are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Long-term provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money. Short term provisions are carried at their redemption value and are not offset against receivables from reimbursements.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.

ii. Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

P. Earnings per Share:

a) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.

Q. Leases:

Lease in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases.

As a lessee

Payments made under operating leases (net of incentives received from the lessor) are charged to Statement of Profit and Loss on a straight line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.

R. Exceptional items:

Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.

1.4 Key Accounting Judgments, Estimates and Assumptions

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.


Mar 31, 2015

A. Basis of preparation of financial statement :

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles(GAAP) and provisions of The Companies Act, 2013 read with the Companies ( Accounts) Rules, 2014 as adopted consistently by the company, except where a newly issued Accounting Standards initially adopted or a revision in to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. Basis of Accounting:

a. The company follows the mercantile system of accounting.

b. All income and expenditure items having material bearing on financial statement are recognized on accrual basis, except Dividend income and insurance claim, if any.

C. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

D. Fixed Assets:

a. All fixed assets are valued at cost of acquisition/ construction. The cost of fixed assets comprises of its purchase price and attributable costs including finance cost, of bringing the assets to its working condition for its intended use.

b. Capital Work in Progress is stated at the amount expended up to the date of Balance Sheet.

c. The expenditure incurred during construction period incidental to the expansion / new project including attributable finance cost, incurred on the project under implementation are treated as Capital Expenditure pending allocation ( to Fixed Assets. These expenses are apportioned to Fixed Assets on commencement of Commercial Activity.

E. Depreciation and Amortisation:

a. Depreciation has been provided on "Straight Line Method" over Use full life of respective Fixed Assets as provided in Part C of Schedule II of the Companies Act,2013.

b. Depreciation on Fixed Assets Purchased / Sold during the period is proportionately charged.

c. Premium paid on Lease hold land is amortized over a period of Lease.

F. Investments:

Investments in shares and securities are long term investments and are stated at cost. Gains / Losses on disposal of such investments are recognized as income / expenditure. When there is a decline in the value of any investment which is not considered to be temporary, then same is provided for by reducing the value of investment and charging the same to the statement of Profit & Loss.

G. Inventories:

a. Company follows the practice of charging to revenue, the cost of various inventories, on actual consumption basis.

b. Inventories are valued at lower of cost or net realizable value. Cost is arrived at on First In First Out basis.

H. Cash & Cash Equivalent :

Cash and Cash equivalent for purpose of cash flow statement comprise cash at bank and in hand and short term investment with an original maturity of 3 months or less.

I. Provision for Taxation

The amount of Income Tax is provided in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

J. Benefits to Employees:

The Company's contributions to the Provident Fund are charged to the Profit and Loss Account.

The Gratuity payable at the time of retirement are charged to the Profit and Loss Account on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Profit and Loss Account.

The employees of the Company are entitled to leave/leave encashment as per the Leave Policy of the Company.

The provision for Leave Encashment is made on the basis of independent external actuarial valuation carried out at the end of the year/ period to which it pertains.

K. Revenue from Operation:

Revenue from Operation comprise of sale of Guest Rooms, Food and Beverages, Wine Sales but exclusive of Luxury Tax, VAT, Service Tax and other Taxes.

Other Operating Income includes Income from Hall Hire, Equipment Hire, Miscellaneous Banquet Services, Telecommunication, Laundry Services, Sale of Scraps, Travel Desk, Educational Division, Tips from guest, flower decoration and other miscellaneous services.

L. Other Income:

Other Income comprises of gain or loss in Foreign exchange earnings, Interest Received, Dividend Received and Other Miscellaneous Income.

M. Events after the date of Balance Sheet:

Wherever material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

N. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources to settle the obligation. Provision is not discounted to its present value and is determined based on the best estimate required to settle an obligation at the year end. These are reviewed every year end adjusted to reflect the best current estimate. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

O. Foreign Currencies:

Transactions in Foreign Currencies are generally recorded by applying to the Foreign Currency amount, the exchange rate existing at the time of transaction.

At year / period end monetary items denominated in foreign currency remaining unsettled are converted in to Indian Rupee equivalents at the year / period end exchange rates.

Gains or Losses on settlement, in a subsequent period of the transactions entered into in an earlier period, are credited or charged to the statement of Profit & Loss.

P. Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evolution of the facts and legal aspects of the matter involved.

Q. Prior Period & Extra Ordinary Items:

Prior Period adjustment, extra ordinary items and changes in the accounting policies having material impact on the financial affairs of the Company are disclosed.

R. Assets Impairment:

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognized in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

S. The Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to the revenue.


Mar 31, 2014

A. Basis of preparation of financial statement :

a. The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and provisions of The Companies Act, 1956 as adopted consistently by the company and ongoing concern basis.

b. Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

B. Basis of Accounting:

a. The company follows the mercantile system of accounting.

b. All income and expenditure items having material bearing on financial statement are recognized on accrual basis, except Dividend and insurance claim, if any.

C. Fixed Assets:

a. All fixed assets are valued at cost of acquisition/ construction. The cost of fixed assets comprises of its purchase price and attributable costs including finance cost, of bringing the assets to its working condition for its intended use.

b. The expenses incurred during construction period, incidental to the Expansion / New Project are allocated to respective Fixed Assets in the year of commencement of the commercial operation.

c. Premium paid on Lease hold land is amortized over a period of Lease.

D. Depreciation:

a. Depreciation has been provided on "Straight Line Method" in accordance with the provisions of the Section 205(2) (b) of The Companies Act, 1956.

b . Depreciation on fixed assets acquired and put to use up to 15.12.93 has been provided at the rates prevailing at the time of their acquisition and on the assets acquired after that date at the rates as per Schedule XIV of the Companies Act, 1956

c . Depreciation on fixed assets added during the financial year has been computed on pro-rata basis with reference to period of use of such assets.

d. Assets whose actual cost does not exceed Rs.5,000/- have been classified under respective groupings as per their nature.

E. Investments: Investments in shares and securities are long term investments and are stated at cost. Gains / Losses on disposal of such investments are recognized as income / expenditure. When there is a decline in the value of any investment which is not considered to be temporary, then same is provided for by reducing the value of investment and charging the same to the statement of Profit & Loss.

F. Inventories:

a. Company follows the practice of charging to revenue, the cost of operating inventories of crockery, glassware, cutlery & curtains in the year of purchases, except under expansion project.

b. Inventories of food materials and beverages, stores and supplies, coal and fuel, wine are valued at lower of cost or net realizable value. Cost is arrived at on First In First Out basis.

G. Cash & Cash Equivalent :

Cash and Cash equivalent for purpose of cash flow statement comprise cash at bank and in hand and short term investment with an original maturity of 3 months or less.

H. Provision for Taxation The amount of Income Tax is provided in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

I. Benefits to Workmen: The Company''s contributions to the Provident Fund are charged to the Profit and Loss Account.

The Gratuity payable at the time of retirement are charged to the Profit and Loss Account on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Profit and Loss Account.

The employees of the Company are entitled to leave/leave encashment as per the Leave Policy of the Company. The provision for Leave Encashment is made on the basis of independent external actuarial valuation carried out at the end of the year/ period to which it pertains.

J. Revenue from Operation:

Revenue from Operation comprise of sale of Guest Rooms, Food and Beverages, Wine Sales, Income from Business Centre but exclusive of Luxury Tax, VAT, Service Tax and other Taxes. Other Operating Income includes Income from Hall Hire, Miscellaneous Banquet Services, Telecommunication, Laundry Services, Sale of Scraps, Travel Desk, Educational Division tips from guest and other miscellaneous services.

K. Other Income: Other Income comprises of gain or loss in Foreign exchange earnings, Interest Received, Dividend Received and Other Miscellaneous Income.

L. Events after the date of Balance Sheet: Wherever material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

M. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources to settle the obligation. Provision is not discounted to its present value and is determined based on the best estimate required to settle an obligation at the year end. These are reviewed every year end adjusted to reflect the best current estimate. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

N. Foreign Currencies:

Transactions in Foreign Currencies are generally recorded by applying to the Foreign Currency amount, the exchange rate existing at the time of transaction. At year / period end monetary items denominated in foreign currency remaining unsettled are converted into Indian Rupee equivalents at the year / period end exchange rates. Gains or Losses on settlement, in a subsequent period of the transactions entered into in an earlier period, are credited or charged to the statement of Profit & Loss.

O. Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evaluation of the facts and legal aspects of the matter involved.

P. Prior Period & Extra Ordinary Items:

Prior Period adjustment, extra ordinary items and changes in the accounting policies having material impact on the financial affairs of the Company are disclosed.

Q. Assets Impairment:

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognized in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

R. The Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the revenue.


Mar 31, 2012

A. Basis of preparation of financial statement:

a. The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and provisions of The Companies Act, 1956 as adopted consistently by the company and ongoing concern basis.

b. Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

B. Basis of Accounting:

a. The company follows the mercantile system of accounting.

b. All income and expenditure items having material bearing on financial statement are recognized on accrual basis, except Dividend and insurance claim, if any.

C. Fixed Assets:

a. All fixed assets are valued at cost of acquisition/ construction. The cost of fixed assets comprises, of its purchase price and attributable costs including finance cost, of bringing the assets to its working condition for its intended use.

b. The expenses incurred during construction period, incidental to the Expansion / New Project are allocated to respective Fixed Assets in the year of commencement of the commercial operation.

c. Premium paid on Lease hold land is amortized over a period of Lease.

D. Depreciation:

a. Depreciation has been provided on "Straight Line Method" in accordance with the provisions of the Section 205(2)

(b) of The Companies Act, 1956.

b. Depreciation on fixed assets acquired and put to use up to 15.12.93 has been provided at the rates prevailing at the time of their acquisition and on the assets acquired after that date at the rates as per Schedule XIV of the Companies Act, 1956

c. Depreciation on fixed assets added during the financial year has been computed on pro-rata basis with reference to period of use of such assets.

d. Assets whose actual cost does not exceed Rs.5,000/- have been classified under respective groupings as per their nature.

E. Investments:

Investments in shares and securities are long term investments and are stated at cost. Gains / Losses on disposal of such investments are recognized as income / expenditure. When there is a decline in the value of any investment which is not considered to be temporary, then same is provided for by reducing the value of investment and charging the same to the Statement of Profit & Loss.

F. Inventories:

a. Company follows the practice of charging to revenue, the cost of operating inventories of crockery, glassware, cutlery & curtains in the year of purchases, except under expansion project.

b. Inventories of food materials and beverages, stores and supplies, coal and fuel, wine are valued at lower of cost or net realizable value. Cost is arrived at on First In First Out basis.

G. Cash & Cash Equivalent :

Cash and Cash equivalent for purchase of cash flow statement comprise cash at bank and in hand and short term investment with an original maturity of 3 months or less.

H. Provision for Taxation

The amount of Income Tax is provided in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

I. Benefits to Workmen:

The Company's contributions to the Provident Fund are charged to the Profit and Loss Account.

The Gratuity payable at the time of retirement are charged to the Profit and Loss Account on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Profit and Loss Account.

The employees of the Company are entitled to leave/leave encashment as per the Leave Policy of the Company.

The provision for Leave Encashment is made on the basis of independent external actuarial valuation carried out at the end of the year/ period to which it pertains.

J. Revenue from Operation:

Revenue from Operation comprise of sale of Guest Rooms, Food and Beverages, Wine Sales Income from Business Centre but exclusive of Luxury Tax, VAT, Service Tax and other Taxes.

Other Operating Income includes Income from Hall Hire, Miscellaneous Banquet Services, Telecommunication, Laundry Services, Sale of Scraps, Travel Desk, Educational Division and other miscellaneous services.

K. Other Income:

Other Income comprises of gain or loss in Foreign exchange earnings, Interest Received, Dividend Received and Other Miscellaneous Income.

L. Events after the date of Balance Sheet:

Wherever material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

M. Miscellaneous Expenditures:

Preliminary expenses, public issue expenses and right issue expenses are amortized over a period of five years.

N. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources to settle the obligation. Provision is not discounted to its present value and is determined based on the best estimate required to settle an obligation at the year end. These are reviewed every year end adjusted to reflect the best current estimate. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

O. Foreign Currencies:

Transactions in Foreign Currencies are generally recorded by applying to the Foreign Currency amount, the exchange rate existing at the time of transaction.

At year / period end monetary items denominated in foreign currency remaining unsettled are converted in to Indian Rupee equivalents at the year / period end exchange rates.

Gains or Losses on settlement, in a subsequent period of the transactions entered into in an earlier period, are credited or charged to the statement of Profit & Loss.

P. Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evolution of the facts and legal aspects of the matter involved.

Q. Prior Period & Extra Ordinary Items:

Prior Period adjustment, extra ordinary items and changes in the accounting policies having material impact on the financial affairs of the Company are disclosed.

R. Assets Impairment:

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognized in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

S. The Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to the revenue.


Mar 31, 2010

A. Basis of preparation of financial statement :

a. The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956 as adopted consistently by the company and on going concern basis.

b. Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

B. Basis of Accounting:

a. The company follows the mercantile system of accounting.

b. All income and expenditure items having material bearing on financial statement are recognized on accrual basis, except Dividend and insurance claim, if any.

C. Fixed Assets:

a. All fixed assets are valued at cost. The cost of fixed assets comprises of its purchase price and attributable costs including finance cost, of bringing the assets to its working condition for its intended use.

b. Premium paid on Lease hold is amortized for period of intended use.

D. Depreciation:

a. Depreciation has been provided on “Straight Line Method" in accordance with the provisions of the Section 205(2) (b) of the Companies Act, 1956.

b. Depreciation on fixed assets acquired and put to use up to 15.12.93 has been provided at the rates prevailing at the time of their acquisition and on the assets acquired after that date at the rates as per Schedule XIV of the Companies Act, 1956.

c. Depreciation on fixed assets added during the financial year has been computed on pro-rata basis with reference to period of use of such assets.

d. Assets whose actual cost does not exceed Rs. 5,000/- have been classified under respective groupings as per their nature.

E. Investments:

Investments in shares and securities are long term investments and are stated at cost. Gains / Losses on disposal of such investments are recognized as income / expenditure. When there is a decline in the value of any investment which is not considered to be temporary, then same is provided for by reducing the value of investment and charging the same to the Profit & Loss Account.

F. Inventories:

a. Company follows the practice of charging to revenue, the cost of operating inventories of crockery, glassware, cutlery & curtains in the year of purchases, except under expansion project.

b. Inventories of food materials and beverages, stores and supplies, coal and fuel, wine are valued at lower of cost or net realizable value. Cost is arrived at on First In First Out basis.

G. Provision for Taxation:

The amount of Income Tax and Fringe Benefit Tax are provided in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable income and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

H. Benefits to Workmen:

Companys contributions to the Provident Fund are charged to the Profit and Loss Account.

Gratuity Payable at the time of retirement are charged to the Profit and Loss Account on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Profit and Loss Account.

Provision for Leave encashment is made on the basis of independent external actuarial valuation carried out at the end of the year.

I. Sales:

Sales Comprise of Sale of Rooms, Food and Beverages, Wine Sales Income from Business Centre but exclusive of Luxury Tax, Sales Tax, VAT, Service Tax and other Taxes.

Other Operating Income includes Income from Hall Hire, Miscellaneous Banquet Services, Telecommunication, Laundry Services, Travel Desk and Educational Division Income.

J. Other Income:

Other Income Comprise of sale of scrap, Interest Received, Dividend Received and other Miscellaneous Income.

K. Events after the date of Balance Sheet:

Wherever material events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

L. Miscellaneous Expenditures:

Preliminary expenses, public issue expenses and right issue expenses are amortized over a period of five years.

M. Provisions, Contingent Liabilities and Contingent Assets:

Provision involving substantial degree of estimation in measurement are recognized. When there is a present obligation as a result of past event and it is probable that there will be an outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

N. Foreign Currencies:

Transactions in Foreign Currencies are generally recorded by applying to the Foreign Currency amount, the exchange rate existing at the time of transaction.

Gains or Losses on settlement, in a subsequent period of Transactions entered into in an earlier period are credited or charged to the Profit & Loss Account.

O. Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evolution of the facts and legal aspects of the matter involved.

P. Prior Period & Extra Ordinary Items:

Prior Period adjustment, extra ordinary items and changes in the accounting policies having material impact on the financial affairs of the Company are disclosed.

Q. Assets Impairment:

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognised in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

R. Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs charged to revenue.

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